Finning International Inc. has announced the sale of Hewden, its UK equipment rental business, for gross proceeds of £110.2 million to an affiliate of Sun European Partners, LLP, the European adviser to Sun Capital Partners, Inc. Hewden will be reported as a discontinued operation in the second quarter of 2010.
“After a comprehensive review, we have determined that for strategic and financial reasons, it is in our shareholders’ best interest to divest Hewden,” said Mike Waites, president and chief executive officer of Finning International Inc. “While we believe that Hewden’s broad product offering combined with our recent restructuring and national accounts focus will serve it well in the future, owning a large, short-term rental business operating separately from our UK dealership does not align with our strategic objectives”.
“This is a continuation of our journey towards a new Finning and the final step in rationalizing our UK operations. Combined sale proceeds from this transaction, Hewden Tools, and the dealership’s Materials Handling divisions total almost $600 million,” noted Mr. Waites. “We have a great business model going forward and are completely focused on driving the operating performance and value potential of Finning.”
Hewden covers 63 locations in the U.K. and has 1,300 employees. The existing Hewden commercial centre in Manchester is proposed to be the new head office for Hewden and Finning has agreed to provide transitional services to Hewden.
Finning UK will continue to operate 20 branches in the U.K. with 1,470 employees serving Caterpillar dealership customers throughout the UK based from its head office in Cannock, Staffordshire.